I think it's the "less of a pain" thing that we don't see eye-to-eye on... I don't mind the knightly orders in general, but I think in spite of your efforts, the events are still a major pain, and definitely too much of a pain to leave in there in their current form.
And yeah, as a matter of fact I did eventually delete this event... but that's really not a solution. If I'm posting about a problem to the beta forum, I would much rather hear that you are going to do something about it, than merely get advice on how I can fix it myself. Especially since in this case, I really didn't fix it - I don't want to cut the Teutons out completely, I just want them to make more sense, and to be a bit less harmful.
As for the historical flavour, I think what you need to appreciate is that historical flavour in this game frequently clashes - and loses - against historical non-determinism. This is one example of this. After all, the Teutonic knights in this part of europe were a historical result of the crusades coming to an end. In a greater context, the story of the Teutonic knights is not a story of a crusading order - it's the story of a bunch of out-of-work soldiers trying to make something of themselves after the war is done. So, having them appearing in the Baltic area starting from 1066 is definitely not historical flavour, it's historical anti-flavour. Historical flavour would be to have the Teutons appear in the Baltic area after the crusades. And then, of course, you could do the same with the other orders - the Templars in France or England, etc..